Written by

Rodan + Fields is an anti-aging skin care company that distributes its products through a direct-selling model. Based in San Francisco, the company was founded in 2002 by Katie Rodan and Kathy Fields, the same doctors who created Proactiv, the acne-fighting product line that is endorsed by a host of celebrities through commercials on television and online.

Since moving to the direct sales model in 2008, Rodan + Fields has built a network of 50,000 consultants, with Nashville among its top 10 markets. Overall, the company generated close to $200 million in revenue in 2013.

Estee Lauder acquired Rodan + Fields in 2003 and the product was sold in department stores across the country, placement that many companies would dream of. What made you decide to turn to the direct-selling model?

Rodan: When we launched the company, we wanted to diversify the channels of distribution because we were interested in high-end retail and we thought that was the place to be. Very quickly, we found out really what made us successful at retail was word of mouth. While performance was very good and we were amongst the top three clinical skin care brands in retail in the stores we were in, that reality was very small compared to our vision. We said, how do we move to a different channel of distribution that really connects our strength and gives the doctors the ability to touch the consumers, talk directly to consumers and then allows the consumers, with word of mouth, to really get the momentum going. As we started looking, the place that made the most sense for us was the direct sales market. It’s been the best decision we’ve made.

You began direct selling just months before the financial crisis erupted and the economy tumbled. You hear about “the lipstick effect” and beauty products being recession-proof. How did the timing affect the company’s growth?

Rodan: It didn’t. We grew from $3 million to $10 million to $22 million to $60 million right through the recession. A lot of people were looking for an alternative. (The recession) shook people’s foundation and belief that if they are doing the right thing in corporate America, they are safe. People started saying, “What else can I do?” “Where is my plan B?” They started looking around. A lot of people have experience with Rodan + Fields through our previous company, Proactiv. They knew we were a real brand. When you combine the real brand with the market opportunity of anti-aging and the business opportunity with technology, they said, “Wow, this is something really powerful; we want to try it as our plan B.”

Bush: We also found early on some of our early adopters in the business model were coming out of the real estate and mortgage industries. They were people who were absolutely looking because they were hit so hard.

The lipstick effect (is a) myth buster. (In this last recession) the three categories of beauty, which are makeup, fragrance and skin care, all of the categories were down with the recession. When they looked at skin care, however, what they found is that the economy was not even one of the top five reasons. The main reason that skin care was off was people had lost confidence. There were so many products flooding the market with all kinds of claims and people were disappointed in the results and had started backing away from the category because they had lost faith. That was one the big opportunities for us, to bring well-validated products with a clinical dermatology foundation through a connection where we actually help people connect to the right products for them.

What makes a successful consultant?

Rodan: Someone who has a “why,” who has a reason that drives them, because, at the end of the day, these are independent business owners. They have to have the fire in the belly to not just talk the talk but walk the walk. It’s a hard business — it’s hard work. Those who have that passion and have leadership capabilities and are outgoing grow their business.

What trends are you seeing in the consumer market?

Bush: When we were preparing to launch our Amp MD product in 2010, we really wanted to get attitudinal aspects of aging by different ages. What we found is that the 20-year-olds were as concerned about their aging and as interested in taking care of their skin as 50-year-olds and even more so, in some cases, than 60-year-olds. We think that may be because of their parents, their mothers. They grew up in an era when the cosmetics industry came into its own but also did things like fillers and Botox. There is an appreciation that if you start taking care of your skin when you are younger, it’s going to go the distance for you more effectively.